Market is experiencing volatile period from February 2012. After experiencing a correction, it seemed like market may be starting the next BULL move late June 2012, however the uptrend came under tremendous pressure in last two weeks due to global macro economic situations. Now we are at critical junction, WHY!!!
One might be wondering as to why is Market acting so weird lately! Right when we thought we got a confirmed BUY signal, last week market crossed MA(100) from above triggering SELL signal. What is happening!!! Welcome to the world of STOCK MARKET. Nothing here is guaranteed, its a game of probability and anything can happen. Hence STOP predicting the markets instead follow the markets. CONFUSED!!!
Below chart tells us two things:
Opposite signals, what should we do?
Below chart tells us two things:
- Top section - Nifty crossing MA(100) from above triggering SELL signal
- Bottom section - McClellan Index still above EMA(59) suggesting possible higher moves
Opposite signals, what should we do?
As per our guidelines, whenever we have opposite signs then we follow signal provided by MA(100). However, before we come to any conclusions lets look at other charts.
Nifty daily chart below shows that market is at critical support level provided by MA(50) & MA(200). Market is bearing hanging on to it and we have two possible scenarios:
Nifty daily chart below shows that market is at critical support level provided by MA(50) & MA(200). Market is bearing hanging on to it and we have two possible scenarios:
- Break below support and uptrend is in serious trouble followed by next support at 4900-4800 level
- Bounce from this level and continue Up trend
Weekly Nifty chart below suggest that market has formed a new trend channel show below with green lines. Although, it may seem that market might remain in this channel thereby moving slowly upwards, volume is NOT supporting UP move which is a concern.
What should we do with our Long Term Investments!!!
Mutual Funds - For now stay invested until we see a serious breakdown, market may remain in this channel for weeks/months before any actual breakdown
Stocks/ETFs - make sure you take partial profits along the way as well as have STOP LOSS LIMIT to protect capital
Market will provide enough time to get out before any major breakdown, if that means we have to forego some gains or incur small loss, consider it as part of the doing investments. Any time when we have lot of global uncertainty then markets across the globe will experience lot of volatility. The key to avoid catastrophic losses is to have a exit plan at the right time.
A successful investor's characteristics:
Good Luck...
Mutual Funds - For now stay invested until we see a serious breakdown, market may remain in this channel for weeks/months before any actual breakdown
Stocks/ETFs - make sure you take partial profits along the way as well as have STOP LOSS LIMIT to protect capital
Market will provide enough time to get out before any major breakdown, if that means we have to forego some gains or incur small loss, consider it as part of the doing investments. Any time when we have lot of global uncertainty then markets across the globe will experience lot of volatility. The key to avoid catastrophic losses is to have a exit plan at the right time.
A successful investor's characteristics:
- Protect capital as FIRST priority
- Be disciplined and have a plan
- Be patient and don't panic
- Stay focused
- Be informed and alert!
Good Luck...